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Purple Innovation Announces Results for Second Quarter

August 11, 2026  by Karen Parrish in Business Strategy, Industry   

"The second quarter demonstrated continued progress in the areas we can control, even as industry conditions remained challenging and we fell short of our top-line expectations," said Rob DeMartini, CEO of Purple Innovation. "Our direct-to-consumer business grew, led by another strong quarter in showrooms, while e-commerce trends improved sequentially for the third consecutive quarter.  GAAP Net Loss and Adjusted EBITDA improved compared with last year, including the benefit from tariff refunds."

"These results reinforce that Purple is operating from a stronger and more disciplined foundation. We remain focused on helping consumers better understand why the GelFlex Grid is different, strengthening the experience across our direct channels, advancing our innovation pipeline and maintaining the cost discipline that is supporting improved profitability and cash generation in a difficult demand environment."

Second Quarter 2026 Financial Results
Second quarter 2026 net revenue was $98.3 million, down 6.5% compared to $105.1 million in the second quarter of 2025. The decrease was primarily driven by lower wholesale revenue, partially offset by strong growth in showroom revenue.

Direct-to-consumer revenue increased 3.4%, reflecting a 16.6% increase in showroom revenue and a 1.4% decrease in e-commerce revenue. Wholesale revenue decreased 19.1% to $37.4 million, compared with $46.2 million in the prior-year period. The decrease reflected a $5.3 million increase in certain payments to customers and a manufacturer under common control and a $3.5 million decrease in wholesale sales volume related to lower industry demand.

Gross profit increased 4.5% to $44.4 million, compared to $42.5 million in the prior-year period. Gross margin was 45.2%, an increase of approximately 470 basis points year-over-year, primarily due to the $5.3 million tariff refund.

Beginning in the second quarter of 2026, the Company changed the presentation of costs associated with merchant credit-card processing fees and third-party consumer-financing fees from being presented in cost of revenues to now being presented in marketing and sales costs. Prior periods have been revised to conform to the current presentation. This reclassification had no impact on previously reported revenue, operating loss, net loss, adjusted EBITDA or cash flow. The reclassification increases GAAP gross margin in the second quarter by approximately 500 basis points, with a corresponding 500 basis point increase in marketing and sales expense.

Second quarter operating expenses were $48.7 million, down approximately 14.3% from the prior-year quarter.  The improvement was primarily driven by the absence of restructuring related costs incurred in the prior year period, lower employee related expenses and professional services and all other operating expenses, partially offset by an increase in advertising spending. 

GAAP Net Loss for the second quarter was $3.2 million, a $14.1 million improvement versus the prior period.

Adjusted EBITDA for the second quarter was $2.1 million, an improvement of $4.4 million from an adjusted EBITDA loss of $2.4 million in the prior-year period. Adjusted EBITDA is a non-GAAP financial measure. See discussion under the heading "Non-GAAP Financial Measures" below for additional information.

Balance Sheet
The Company ended the second quarter with cash and cash equivalents of $23.3 million, compared with $24.3 million as of December 31, 2025.

Net inventories as of June 30, 2026, totaled $55.4 million, down 7.2% compared to December 31, 2025.  Cashflow from operating activities YTD as of June 30, 2026 was $3.6M, a $30.7 million improvement over the prior year's same period.

Nasdaq Listing Update
Subsequent to the end of the second quarter, Purple Innovation has received written notification from The Nasdaq Stock Market LLC confirming that the Company has regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5450(a)(1). Accordingly, the previously disclosed bid price deficiency matter has been closed.

2026 Outlook
Given the continued softness in the category, particularly in wholesale, we are lowering our revenue guidance in the range of $420 million to $440 million. Importantly, the continued strength of our DTC business, coupled with our cost discipline, gives us confidence in our ability to deliver adjusted EBITDA of $20 million to $25 million for fiscal 2026.

Conference Call and Webcast Information
After the conference call on August10, the webcast replay will remain available on the investor relations section of the Company's website for one year.